India Trade December 2015

India: Trade deficit widens in December

January 19, 2016

Recently released data related to India’s external sector showed that the trade deficit totaled USD 11.7 billion in December, which was a larger shortfall over the USD 9.2 billion deficit observed in the same month of the previous year. For the 12 months up to December, the trade deficit recorded USD 126.2 billion, which was a more pronounced gap than the 123.7 billion deficit tallied in the 12 months up to November.

The narrowing in the trade deficit showed that imports contracted 3.9% annually in December, which was a significantly smaller drop than the 30.3% plunge tallied in November. November’s fall had marked the largest contraction in over six years. December’s drop was largely the result of the low oil-price environment. Accordingly, oil imports totaled USD 6.7 billion, which represented a 33.2% decrease compared to the same month of the previous year.

Meanwhile, exports fell 14.8% in December, which was a smaller fall than November’s 24.4% contraction and marked the best result in five months.

Operating conditions in India’s manufacturing sector were less upbeat in January from the previous month, with evidence suggesting that the Goods and Services Tax (GST) remains a risk to business performance as firms face delayed payments.